First Financial files civil suit against former employee, Bank of Graymont

Thursday

Jan 3, 2013 at 11:24 AMJan 3, 2013 at 11:26 AM

By Cynthia Grau

First Financial Bank has filed a civil complaint against a former employee and his new employer in U.S. District Court, Peoria.Eight counts, including breach of contract, were filed against former First Financial employee Scott Bauknecht and his new employer, State Bank of Graymont.Other counts against Bauknecht and/or State Bank of Graymont include breach of fiduciary duty, misappropriation of trade secrets, and civil conspiracy, alleging Bauknecht took confidential information and other First Financial property when he resigned his position in 2012 and joined State Bank of Graymont.According to the complaint filed Dec. 13, First Financial Bank is seeking compensatory damages in an amount exceeding $75,000, along with a request that State Bank of Graymont returns all the documents and doesn’t use any of the information obtained from those documents, punitive damages and attorney’s fees and litigation costs.Bauknecht’s attorney says the civil suit has no merit and that allegations against his client are false and will be “vigorously defended.” Bauknecht, who had been employed with First Financial Bank and its predecessors since June of 1995, left his position Jan. 23, 2012, gaining employment with State Bank of Graymont the following day, Jan. 24.The documents state that Bauknecht assumed the title of vice president and loan officer at First Financial Bank at the time of the merger, which was Dec. 31, 2011, with Freestar Bank. The filing states that he abused his position with First Financial by accessing, downloading or compiling confidential information from the bank’s computers, electronic storage devices, files or other resources in order to create a database for use in competition against First Financial, to which the complaint claims that Bauknecht had no authority to access the information. It also says that Bauknecht targeted loan status and terms of several First Financial lending accounts. It then claims that Bauknecht abruptly left his position at First Financial and immediately started working as a loan officer for State Bank of Graymont. When leaving First Financial, it is claimed that Bauknecht took with him all of the confidential information he had gathered together to begin soliciting business in his new position as loan officer for Graymont, including, without limitation, through written correspondence to First Financial customers. The claim also says it has copies of some of the written correspondence. It is then claimed that Bauknecht used information obtained from First Financial to the defendants’ advantage, including, without limitation, by offering and completing refinanced loan transactions accounting for more than $10 million on more than 20 loans with First Financial customers, many of whom had been the subject of targeted loan inquiries by Bauknecht prior to his departure from First Financial. The last claim is that Bauknecht made misrepresentations toward First Financial’s products, business, terms of loans in an effort to influence the customers to make the move to State Bank of Graymont.Bauknecht’s attorney, Nile Williamson, stated that the allegations toward his client are false.“They center on the allegation by the plaintiff, which is First Financial Bank, that it has lost a considerable sum of money since Mr. Bauknecht left their employ and it references numerous customers of First Financial that have transferred their assets, transferred their loans to the bank that presently employs Mr. Bauknecht, which is (State Bank of) Graymont. There’s no doubt that a lot of customers did transfer their assets and their business to Mr. Bauknecht, but it had nothing to do with any conduct that was untoward on Mr. Bauknecht’s part. It had to do with their understanding of his professionalism and competency in banking,” Williamson said.Bauknecht has not made any public statement and Williamson said he doesn’t expect him to.“We don’t believe that the allegations of the complaint are in any way correct and we’ll defend the case vigorously,” Williamson said.Senior U.S. District Judge Joe B. McDade is hearing this civil case.“In the Central District, normally a case is going to run between 10 and 14 months. It depends on each individual case, of course. It’s routine in the federal system for a motion for summary judgment to be filed and I anticipate one will be filed in this case. If that motion were to be granted, there would be no trial,” Williamson explained.The Daily Leader attempted to reach out to First Financial Bank’s attorney, Robert Kearney, for comment and the call was not returned.A trial by jury was requested, but there has not been a date set yet. Summonses were issued to Bauknecht and State Bank of Graymont, with their answers due Jan. 16 and Jan. 9, respectively.